There's no single "right" amount — but there is a precise one for your goal. The math works backwards: choose a target, a time horizon and a realistic return, and the required monthly contribution falls out. Here are the numbers you can reproduce on our Savings Goal calculator.
Monthly savings to reach a goal
Assuming contributions at the end of each month, compounding monthly:
| Goal | Time | At 5% | At 7% | At 10% |
|---|---|---|---|---|
| $250,000 | 20 years | $608 / month | $480 / month | $329 / month |
| $500,000 | 30 years | $601 / month | $410 / month | $221 / month |
| $1,000,000 | 30 years | $1,202 / month | $820 / month | $442 / month |
Notice what the return does: to reach $1,000,000 in 30 years, you need $1,202/month at 5% — but only $442/month at 10%. The higher expected return more than halves the required savings rate. That's compound interest doing the heavy lifting.
The flip side: what $1,000 a month becomes
Working forward instead — $1,000 saved every month for 20 years:
| Return | You contribute | Final value | Growth |
|---|---|---|---|
| 5% | $240,000 | $411,034 | $171,034 |
| 7% | $240,000 | $520,927 | $280,927 |
| 10% | $240,000 | $759,369 | $519,369 |
Which return should you use?
- 5% — a conservative assumption; roughly what a balanced, low-risk portfolio might aim for.
- 7% — the often-quoted long-run stock-market average before inflation; roughly the S&P 500’s real return since 1926, per long-run data compiled by NYU Stern’s Aswath Damodaran (Source: NYU Stern historical returns).
- 10% — an optimistic long-run stock return; don't plan your survival on it.
Past performance never guarantees future results. If you plan with 7% and the market delivers less, you'll have to save more later — that's why a small cushion matters.
The takeaway
Start from the goal, not from an arbitrary number. Pick your target and date, choose a realistic return, and the required monthly amount is math — not a guess. Use the Savings Goal calculator to find your exact number, then adjust for inflation using the Inflation calculator so your target is measured in today's dollars.